ADMIS News
COCOA
The sharp explosion in prices over the two prior trading sessions, followed with a higher high early today, leaves the bull camp with a definitive technical edge. However, despite the constant fret over El Nino some internal fundamentals are giving off bearish signals. Along those lines, Ivory Coast arrivals over the last week of 7,227 tons puts total arrivals at 2.11 million tons. Last year Ivory Coast arrivals were 1.76 million tons at this point in the arrival season creating a year-over-year shortfall of 350,000 tons. It should be noted that Ivory Coast and Cameroon farmers are applying pesticides to reduce disease threats which can be seen in the face of excess moisture and while that might reduce disease threats it might also be confirmation of conditions signally the potential emergence of disease.
COFFEE
Unlike the cocoa market, the coffee market is not seeing a definitive reaction to the El Niño theme primarily because of surging coffee exports from the world’s largest robusta coffee producer. As indicated yesterday, cumulative 2026 seasonal Vietnamese exports are up 21% on a year-over-year basis and have mostly been offset by a 24% year-over-year decline in Ugandan coffee exports. On the other hand, Brazil (the biggest Arabica coffee producer) has seen below average rainfall and could become more sensitive to the El Nino theme directly ahead
COTTON
With yesterday’s initial washout aggressively rejected on a significant jump in trading volume, the uptrend which started last week looks to extend. As in many other soft commodity markets, cotton continues to anticipate further tightening of supply with the added impact of positive demand projections. Certainly, a noted drop in weekly US cotton rated good-to-excellent of 4%, combined with a 4% increase in weekly poor-to-very-poor conditions and ongoing stress in China production areas the supply threat continues to expand. In fact, the weather outlook for Texas and the Gulf Coast calls for an extension of hot temperatures next week. Cotton rated good-to-excellent were down 4% to 42% as of August 2.
SUGAR
In retrospect the sugar market has seen its fundamental condition shift definitively in favor of the bull camp with recent market forecasts signaling the potential for supply risks in Brazil and in Southeast Asia (particularly India during its monsoon season). Not surprisingly, the focus of the sugar market is centered on potential buying from India which has seen supplies narrow and that in turn has increased market speculation they will be forced to import sugar.
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